Trump's $2 Petrol Promise Hinges on Iran War Outcome
US President Donald Trump has made a bold promise to Americans: win the war with Iran and petrol will cost less than $2 a gallon. The current national average is approximately $4.15, according to AAA. Trump believes that an American victory over Iran would reduce the risk premium attached to crude oil, reopen or stabilize shipping routes, and restore disrupted Gulf exports.
While this part of his argument is economically plausible, the second part, petrol below $2, is far harder to achieve. Ending a war can remove a geopolitical premium, but it cannot eliminate refining costs, transport expenses, retail margins, or federal and state taxes.
The White House refuses to formally describe the conflict as a war, and it's unclear when the fighting will end. Every fresh American and Iranian attack is pushing oil prices higher. Brent crude has risen to approximately $97 a barrel, while West Texas Intermediate traded above $92.